Economic model disruption causes anger, fear

By Kim Jae-kyoung

Korea has recently been undergoing fundamental changes in both its economic and social environment.

Unfortunately, the nature of the changes is rather negative. Growth is slowing while wealth disparity is worsening.

In addition, the demographic trend is such that the ability for the government to enhance social infrastructure is limited. These negative macro changes outweigh the potential benefit from globalization and technology innovation.

Simply speaking, Korea’s economic model is being disrupted by a number of changes, and this disruption has frustrated many Koreans who are stuck in old paradigms and ways of thinking.

According to a senior Korean consultant at a global consulting firm, Korea is in stage two of “disruption” in the four-stage “change curve” theory introduced by psychiatrist Elisabeth Kubler-Ross, and that is why many Koreans are so unhappy about their lives.

“The curve explaining how human psychology reacts to change offers a good lens in understanding Korea today,” he told The Korea Times.

“The Korea model of 1980-2010 has been disrupted. I believe Korea is in stage two today -- lots of anger and fear,” he added. “So the country experiences disruption which, if not carefully managed, can quickly spiral into chaos.

The “change curve” model describes the four stages most people go through as they adjust to change. Under the model, once the reality of the change starts to hit, people tend to react negatively and may fear the impact: feel angry and actively resist the change.

The nature of Korean people seeking to promote equality, earn rapid results, make success and be competitive is amplifying the reactions.

“If the government and parliament do things right, it may take four to five years for Korea to move to stage three, which is acceptance and more constructive discussion. Until then, dissatisfaction will dominate,” he said.

Some experts said that the Koreans are scared about the future and are still thinking too much and behaving with the paradigms of the past, but they are not seeing clearly the things that they need to do in the present to make that future bright and shiny.

Stuck in old paradigms

“Korea's accomplishments since 1960 are quite extraordinary, especially for a country with no natural resources and very little useful land,” Seoul Financial Forum Vice Chairman James Rooney said.

“These accomplishments include a GDP growth rate that averaged in excess of 8 percent per annum for almost 40 years, which I do not believe has ever been accomplished before in history and likely will not be again accomplished in the future, even by China.”

Rooney, who has lived in Korea since 1996, said that many of the paradigms used were valid in the context of the past but are not what the country needs for the future.

In many ways the difference is most simply expressed by the huge difference between two English phrases -- the perspiration economy of the past and the inspiration economy for the future, according to him.

“The past economy is all about hard work, being followers, and copying the achievements of others, while the future is all about smart work, becoming leaders, and creating new achievements that others have not yet realized,” said Rooney, also chairman of Apogee.